Confusing work permit policy concerns foreigners in Vietnam

In December of 2012, prominent Ho Chi Minh City attorney Fred Burke told the assembled members of the Vietnam Business Forum (VBF) and a raft of government officials that urgent reforms were needed in to the country’s increasingly byzantine process of obtaining a work permit.

“Work permits can take many months when the police or other authorities do not perform their role, and it is unreasonable to waste trained professionals’ time waiting month after month on the company payroll for these administrative formalities,” he said during a presentation of the findings of the Trade and Investment Working Group.

Two years have passed, but little has changed. Despite repeated outcry from the business community, cities and provinces continue to muddle and complicate the already byzantine process of obtaining a work permit for a foreign employee.

Even as the director of the Baker McKenzie law firm and a major player in the VBF, a consortium of international and local business associations and chambers of commerce, Burke continues to have a hard time getting work permits for his foreign paralegals and proofreaders.

Early this week, one such applicant was denied a work permit despite the fact that she had graduated from a top US university, taught English for two years and been trained on the job for three years.

On Thursday, Burke mounted a podium in Hanoi, and announced that under current requirements, Bill Gates and Steve Jobs wouldn’t qualify for permits to work in Vietnam–drawing wide applause from the room.

“A radical revisit of the current rules should be initiated, especially in light of the special circumstances we are facing.” he said during the midterm meeting, which focused greatly on repairing Vietnam’s investment climate, which has been hit hard by extreme riots triggered by China’s deployment of a US$1-billion oil rig in Vietnam’s territorial waters since early May.

Many Taiwanese factories are now scrambling to replenish their foreign personnel who fled the country –a situation which prompted Prime Minister Nguyen Tan Dung to specifically call on provinces to momentarily straighten a seemingly crooked process.

Other problems

A report submitted by the VBF’s Investment and Trade Working Group noted that Vietnam’s work permit process has made it difficult for the country to make the manufacturing upgrades it needs to actually benefit from the impending US-led Trans Pacific Partnership (TPP) Agreement.

Many manufacturers noted that they could not get short-term permits for experts and consultants heading to Vietnam to implement new technology or to conduct trainings.

“Almost every business represented at the two most recent Vietnam Business Forums had complaints about the new work permit rules, and this is something that is reportedly affecting the entire textile and garment industry,” the group noted.

Much of the problems centered around the “new rule” also known as Decree 102, which took effect last November and required foreign laborers to submit a completed application, two passport photos, a health certificate (issued either in Vietnam or abroad), a copy of one’s passport, and a notarized certificate(s) of expertise.

The decree also required five years of professional experience and a four-year university degree–for everyone from English teachers to corporate executives–to obtain written approval from a municipal or provincial leader.

The decree also required a legalized declaration of no criminal record issued by the applicant’s home authorities–in addition to criminal records issued by Vietnamese agencies–six months before the application is submitted.

Open to interpretation

The implementation of the decree “has been extremely complicated and inconsistent between Ho Chi Minh City, Hanoi, Vung Tau and different provinces,” wrote Laurent Quistrebert of the HR and Training Committee of the European Chamber of Commerce (EuroCham) in Vietnam in a report submitted during the meeting. “This has confused companies and provincial labor officers, which has delayed the work permit application process.”

Labor departments in Hanoi and Bac Ninh Province had required work permit applicants who had only been in the country for a few days to obtain a certificate from the local police attesting to the fact that they’d never been arrested in Vietnam.

Government officials present at the meeting seemed to acknowledge this issue and indicate that it had been largely resolved.

“Initially interpretations by some municipalities were not consistent,” said Le Quang Trung — deputy director of the Employment Department under the Ministry of Labors, Invalids and Social Affairs — during the Thursday meeting. “In response, through this business forum and dialogues with investors, we revisited the expectations with local governments and agencies, especially in Hanoi and Ho Chi Minh City, to ensure proper adoption.”

Renewal woes

However, this month, Ho Chi Minh City authorities further confused the problem by mistranslating a central government decree and implementing stringent requirements on foreigners looking to simply renew their existing work permits.

The city’s labor department incorrectly applied the requirements placed on foreign laborers seeking work permit for the first time to those seeking renewals, news website Thoi Bao Kinh Te Sai Gon (Saigon Times) quoted Nguyen Van Khai, deputy director of the City Labor Federation, as saying.

For all the confusion it did add, Decree 102 did not actually further complicate or alter the perfunctory process of renewing an existing permit.

Despite misinterpretations of the law, renewals only require the submission of a completed application, two passport photos, a health certificate and a work permit that is (still valid for between 5-15 days) and a labor contract.

Under the decree, foreign laborers who want to renew their work permit do not have to submit a criminal record issued in their home country.

Incomplete statistics from the occupation department under the labor ministry shows a total of more than 80,000 foreigners are working in Vietnam as of 2013, of which more than half are in HCMC.

These people come from more than 60 countries, of which 58 percent are from Asia and 28.5 from European countries.

New rules prompt confusion and outcry

The HCMC labor department began befuddling employers and foreign workers on May 16, when it appeared to announce new changes to the renewal process.

Without mentioning the process of renewal, the department stated that foreign laborers with expired work permits must re-apply for a new permit–a process that entails returning to one’s home country to obtain a declaration of no criminal record.

The city’s announcement was sent to companies and organizations who require foreign workers as well as the management agencies of industrial parks and export processing zones, prompting widespread concern.

David Watson, general director of Industry Travel Asia, a HCMC-based tourism company, said he interpreted the rule as yet “another layer of bureaucracy to navigate.”

“[The changes] will generate a new revenue stream level of ‘agents’ to manage the process and of course coffee money for the official document stampers,” he told Thanh Nien News.

Nguyen Van Hau, deputy chairman of the HCMC Jurists’ Association, said the city’s document hinders company operations and the work of foreign laborers.

“It is also an ineffective move in governmental management,” he said.

Nicola Connolly, chairwoman of EuroCham Vietnam, said the city’s notice remains new–so it’s too early to tell whether work permit holders in HCMC will be able to renew their permits or they’ll have to apply for new ones.

Connolly said that if the city is concerned about illegal workers, the city should focus on site inspections and bringing tighter control over tourist visa issuance.

“The people that apply for work permits are trying to be compliant,” she said.